This week I did something that I’ve never done before. I fired a client. Not only a client – but my oldest client, that pays consistently, who’s work is straight forward and who I have never had difficulty communicating with. More over it wasn’t because I’m suddenly inundated with work. I don’t have another client lined up to make up the hours or dollars that I’m going to lose because of this.
Have I gone nuts? Some of my friends certainly think so.
It would have made sense if it was a BAD client, the type that doesn’t pay or demands constant changes and rework. Getting rid of those clients shouldn’t need justification. But this one was pretty good, and I think that a ‘pretty good’ client this is perhaps the worst client of all…
Why ‘pretty good’ is bad
The reason I did it? Opportunity cost.
You’re probably familiar with the term opportunity cost if you’ve ever spent time in the finance world. It simply means that you have limited resources and that when you make a decision, whether it be to work with a client or deal with a customer or build a building – you do it to the exclusion of other options.
We do this all the time in all areas of our lives and unless you’re over-thinking as much as I am you probably don’t notice.
For example, if you have $10,000 (and only $10,000) to invest in a business idea, and after much consideration you choose to buy Shop A for $10,000. You do all the paper work and run the numbers twice and sign off on the deal on Monday. You’re committed. The money is spent. If on Tuesday, your friend tells you about the opportunity of a life time – Shop B – and tells you it will only be $10,000 and that the deal is 10x better than Shop A, there’s nothing you can do about it. Your funds are tied up. You miss the deal.
That’s opportunity cost – The cost of buying Shop A (other than the $10,000) is that you cannot buy Shop B, even though it is a better deal.
So what’s this got to do with my client? Opportunity cost doesn’t relate just to money, it relates to any limited resource. In my case it’s time.
While my newly fired client pays well, I just don’t love the work they need me to do. It’s easy, but it doesn’t play to my strengths and I feel under-utilised and bored.
Time I spend doing boring work is time that I can’t spend doing interesting fulfilling work. Now the obvious thing to do would be to try and systematize and outsource what I was doing so that I keep my client and their revenue stream AND I free up my time to look for a better option. And I think this is what I would have done not too long ago.
But there’s something important I’ve realised recently.
You need to eliminate average before you can replace it with great.
It is much much much harder to make a smooth transition from average to great than it is to just remove the average and replace it with great.
Yes there will be some short term pain with this approach – I now have a hole in my monthly revenue and nothing to fill it with. But it will be easier in the long term to fill this gap with a great client, rather than to try and incrementally improve the currently situation by outsourcing or systemising which will only go so far. You can’t polish a turd.
I think that far too often, we try and make changes slowly and safely because we’re seeking to avoid that dip in income or some other type of ‘pain’ but we don’t factor in what it really costs us. The opportunity cost of our time.
Your Next Action
- mediocre client
- or employee
- or customer
- or project
- or friendship
… that you know is never going to be great.
Take the bold step of removing it even though you have nothing or no-one to immediately make up the short fall.
Make sure the replacement, when it comes is truly great.
What are you going to change?